Money to Liberals never discussed, Sinodinos tells Senate

Senator Arthur Sinodinos says he did not know of donations Australian Water Holdings was making to the NSW Liberal Party either in his role as chairman of AWH or as Treasurer of the NSW Liberal Party.
Photo: Robert Peet

Senator
Arthur Sinodinos
used the last moments of the Senate session on Thursday night to apologise after revealing he failed to declare a range of directorships during his time in the Senate.

Senator Sinodinos altered his statement of registerable interests on Thursday to list the unpaid positions, which included Move2Live Pty Ltd, Aboriginal Employment Strategy Limited, Sir Paul Haslock Foundation and Octant Foundation. He said that at no stage did the companies represent a conbflict of interest.

He also made further statements about his role as chairman of Australian Water Holdings, saying he was unaware of the large donations the company was making to the NSW Liberal Party because he did not believe they were discussed at board level.

Senator Sinodinos said the shares had been held for him by AWH’s major shareholder, Nick Di Girolamo, under what he had previously characterised as a “gentleman’s agreement" but denied any attempt to hide his role in the company.

Related Quotes

Company Profile

“I did not request at any time that these [shares] be held secretly for me," he told the Senate.

On Thursday the Financial Review revealed that in the months before the March 2011 state election that swept the Coalition to power under Premier
Barry O’Farrell
, Australian Water gave $73,803 to the Coalition parties and would have been the NSW Liberal Party’s fifth-largest donor that year.

no recollection of donations

But Senator Sinodinos did not know of the donations, either in his role as chairman of AWH or as Treasurer of the NSW Liberal Party.

On Wednesday, Senator Sinodinos told the Financial Review: “In relation to donations, I have no recollection of individual donations and am unable to speculate about the motivation of third parties making donations."

His role as NSW Liberals treasurer had been largely ceremonial, Senator Sinodinos said in an email: “As honorary treasurer of the Liberal Party in NSW, my role was to help host functions with donors and chair the finance committee. Individual donations were handled by the Liberal Party secretariat in accordance with the relevant code of practice."

He said in the email that “in relation to specific donations, you will need to direct your questions to the parties involved."

Senator Sinodinos told the Senate that when he was on the board of Australian Water the donations were made without reference to him: “I do not recall donations to political parties being addressed at the board level."

He said he had been “very excited by the potential" for Australian Water to become a national player in infrastructure when he became a director on October 31, 2008.

unaware of eddie obeid connection

He had been unaware of any link between the family of Labor powerbroker
Eddie Obeid
but knew that one of his sons worked for the Queensland subsidiary, Australian Water Queensland.

“I can’t recall when I became aware of the role that Edward Obeid Junior had in Queensland," he said. “It was certainly after I became chairman. . . I had very limited dealings with him."

Senator Sinodinos became non-executive chairman of AWH on November 3, 2010. The following day Mr Di Girolamo signed a heads of agreement document with two of Eddie Obeid’s sons, Moses and Paul, witnessed by Edward Obeid Junior, to sell the Obeids a 30 per cent stake in AWH.

Senator Sinodinos he was not aware that Mr Di Girolamo had negotiated what has been reported as a personal loan which can be exercised against AWH shares. He believed he should have been told.

“On the 27th of January, the board agreed to give me some shares, some of which were subject to conditions precedent, all of which had to be documented."

He had declared these on the pecuniary interests register when he entered the Senate in November 2011.

“Obviously I was disappointed" by revelations of the Obeid family’s role in Australian Water, he said, “something I believed in and was passionate about".

“I played no role," he said, in the awarding of a 25-year contract to Australian Water by Sydney Water, singed in January 2012.

“The process was conducted at arms length," he said.

Senator Sinodinos did not refer to the value of his shares. They were granted by the AWH board two months after the Obeids had contracted to pay $3 million for a 30 per cent stake in AWH, which valued the company as a whole at $10 million, and Senator Sinodinos’s stake at $500,000

Australian Water’s uncertain future

At the time, Australian Water faced an uncertain future because of its difficult commercial relationship with Sydney Water, which had sought to end the relationship with AWH.

In June last year, the company raised $7 million at prices which valued the company at $50 million. At this level, Senator Sinodinos’s shares would be worth $2.5 million. Last December. Mr Di Gerolamo told The Sydney Morning Herald the company was worth $75 million, which would value Senator Sinodinos’s shares at $3.75 million.

Senator Sinodinos in his email to the Financial Review on Wednesday referred to claims by former NSW treasurer Michael Costa, who also received a 5 per cent shareholding which was issued directly to him when he succeeded Senator Sinodinos in November 2011, that his shareholding “was worthless when he joined AWH and had grown to $500,000 as a result of the restructure he oversaw".

Mr Costa told the Financial Review on Thursday that he made a commitment in December last year to dispose of his interest in the company without taking any “net financial benefit".

He was taking advice about how to do so.

“Whilst I think there is nothing inappropriate in the remuneration arrangements that were put in place, I’m already on the public record saying that to clear the air on the matter I would be looking at a process to ensure that I don’t get any net financial benefit out of these particular shares."

Mr Costa said he was considering “either divesting back to existing shareholders, staff, or failing [that] ... I would be looking at some arrangement with [a] charity".